Saudi Arabian Oil : Keynote address by His Excellency Yasir Al-Rumayyan at the Middle East Institute

Ladies and gentlemen,

It is a great honor to address so many distinguished friends of the Kingdom. Let me first thank the Middle East Institute, for bringing us together tonight and for honoring me with this award.

Let me also congratulate the MEI on reaching its milestone 75th anniversary.

My subject tonight is the legacy of the Saudi-U.S. partnership.

Though for me, it's more than just a partnership. It's a friendship, founded on trust and mutual respect. It is a partnership based on common interests and shared goals. A common interest in stable global energy markets. A shared sense of responsibility for a peaceful and prosperous world beyond our borders.

If I had to point to one moment that marked the beginning of our partnership, I would say: May 29, 1933. This was the day when the Kingdom's own Founding Father - King Abdulaziz Al Saud - directed our government to sign a concession with Standard Oil of California. A forerunner of today's Chevron.

With the deal done, a small exploration company was set up to hunt for oil in Saudi Arabia's Eastern Province. And for the first few years, they didn't find much.

Then in 1938, just as money and patience were running out, the team struck black gold on a rocky outcrop near the eastern coast. Dammam Number 7: the Kingdom's first commercially viable well - also known as the Prosperity Well.

That discovery was thanks, in large part, to the work of two men. Max Steineke, the company's brilliant Chief Geologist and Khamis bin Rimthan, the company's talented Chief Guide, a man who could read the desert not only like a book, but like a book he'd learnt by heart.

And crucially for the Kingdom's future, both men taught their trade to the other. This partnership between these two men is one of the earliest and best examples of the power of Saudi-U.S. teamwork.

Because that small, speculative oil venture would, of course, one day become Aramco. I mention that history for two reasons.

First, because it shows in outline the essential features of the Saudi-U.S. relationship:

The central role of energy in powering that partnership, the trade in knowledge that has always gone hand in hand with the trade in barrels of crude. It also shows that right from the start, our partnership was based on mutual benefit. Both sides benefitted enormously when they sat down to sign that concession agreement. And that's just as true today.

For example, on average, Aramco spends $10 billion annually on U.S.-based suppliers and contractors and we directly employ almost 7,000 people in the U.S.

Motiva, our refining subsidiary in Texas, is the largest single site crude refinery in North America. Last year, it had a $43.6 billion impact on the U.S. economy, supporting over 74,000 American jobs.

At the same time, Aramco is enriched by U.S. innovation.

We have an R&D Center in Houston, focused on the latest upstream technologies. Another in Detroit working on the next generation of ultra-efficient car engines. And one in Boston researching advanced materials and nanotechnology.

Through our venture capital arm, we've invested in 35 U.S. portfolio companies. This includes a wonderful new unicorn based in Massachusetts called Desktop Metal, that makes the world's fastest 3D metal printers.

The Kingdom's Public Investment Fund, one of the world's largest sovereign wealth funds, is also a significant investor in the U.S. Our portfolio is focused on what we call the Human Future, industries that spur innovation and boost quality of life.

This includes a commitment to invest $20 billion alongside Blackstone and other investors in infrastructure projects in the U.S. Also investments in blue-chip U.S. companies like Uber, mixed reality pioneers Magic Leap and the award-winning U.S. EV-maker Lucid Motors.

But my other reason for starting with this history is that it sets the scene for what's happening in the Kingdom today.

The model of development which began in 1933 has served us well. By channeling Aramco's profits back into the Saudi economy, we've improved the lives of our citizens significantly.

But we're entering a new era.

The time has come to grow and diversify our private sector. Produce more goods and services in our own back yard. Attract more people into the Kingdom - investors, entrepreneurs, creators, pilgrims and tourists.

And of course, we need to prepare for a low-emissions future.

Above all, we need to unleash the talents of our citizens, men and women. Especially the two thirds of Saudis under the age of 35.

This is what our transformation plan, Vision 2030, is designed to achieve. And that plan is working.

Since Vision 2030 was launched by His Royal Highness, the Crown Prince Mohammed bin Salman, non-oil government revenue has more than tripled to 47 percent of total revenue.

The value of the assets managed by PIF has grown to over $450 billion from $150 billion in 2015. The rate of female participation in our workforce has risen from a fifth of Saudi women, to over a third.

That, ladies and gentlemen, is real progress, and there's real excitement in the Kingdom today. But our Vision is not just a Saudi opportunity. I believe it can be an American opportunity too. The energy transition is the clearest example of this. So let me briefly lay out the Kingdom's plan.

At Aramco, we believe our country has a crucial role to play in ensuring a smooth and orderly energy transition. Demand for energy is rising. We cannot deliver - or indeed pay - for that transition if the world stops moving and growing.

Yet it's clear we need lower emissions and ever cleaner forms of energy. This is why, earlier this year, His Royal Highness the Crown Prince announced the Saudi Green Initiative.

It commits Saudi Arabia to plant 10 billion trees in coming decades. It also commits us to generate half the nation's electricity from renewable energy by 2030, an ambitious goal, but we've made a start.

The Kingdom's Sudair Power Project - a 1.5GW solar plant - is set to be among the world's largest. We're also planning one of the world's biggest green hydrogen plants with our U.S. partner Air Products, and Saudi Arabia's ACWA Power and NEOM.

The plant will use 4GW of sunlight and wind to generate 1.2 million tons a year of zero-carbon ammonia.

NEOM's The Line will extend over 170 kilometers, a linear urban development that we're designing to be home to 1 million residents, and guess what? It will preserve 95 percent of nature, within NEOM, with zero cars, zero streets, and zero carbon emissions. But renewables are only one part of the picture.

To deliver against the Paris Accords, the world must tackle greenhouse gases in every part of the energy system, not just the power sector, which produces 40 percent of global emissions, but farming, buildings, transport and industry.

These all have a part to play. And that includes the oil and gas industry. And yes, there's more to do. But we're proud of our environmental record.

We have the lowest upstream carbon intensity of any major producer. At 10.4kg of CO2 per barrel of oil equivalent, it's less than half the average carbon emissions intensity of the OGCI, a group of leading oil and gas producers who explicitly support the aims of the Paris Accords.

Our performance significantly contributes to lowering this group's overall emissions footprint. Nor is this a recent development.

We've been on this road for 40 years. Decades before anyone had heard of ESG, long before it made economic sense, we were capturing our flare gas instead of burning it off.
Why? Because we wanted the gas as a resource for the Kingdom's future power needs, for our future industries.

Because we think in decades, not quarters.

It's why, today, we're working with the world's leading auto-makers to develop cleaner fuels and more efficient engines. Why we're planting millions of mangrove trees to create natural carbon sinks and promote biodiversity.

Why we're building a large petrochemicals business, to find more non-combustible market routes for Saudi oil. And why we're one of the earliest adopters of carbon capture and storage.

Our CO2-enhanced oil recovery demonstration plant at Al-Uthmaniyah captures and injects 800,000 tons-per-year of CO2 for enhanced oil recovery. This is equivalent to taking more than 170,000 passenger cars off the road per year.

And I can tell you now that Saudi Arabia has the geology and the drive to go much further on carbon capture, utilization and storage. We recently used this technology to produce blue hydrogen from natural gas, which we converted to 40 tons of blue ammonia, shipping it to Japan for use in low-emissions power generation.

We believe blue hydrogen has huge potential, both as a low-emissions fuel, and crucially, as an enabler of a low-emissions energy system. In particular, it can help with forms of transport that are too big to be easily powered by batteries.

It can be a baseload backup for renewables. And a fuel for industries like steel and chemicals that require vast inputs of heat and power. This is why we want to be a leader in the new hydrogen economy, just as we are a leader in oil and gas.

And to those who say this new technology is uneconomic or impractical, I say come and see our Master Gas System.

Built at a time when it was neither economic nor practical - today, it is an integral part of the Kingdom's energy infrastructure. Of course, we can't do any of this on our own, and we intend to play a leadership role in our region, recognizing that we share the same challenges as our neighbors.

It's why, later this week, our government is convening a landmark summit of the Middle East Green Initiative. A regional counterpart to our own summit, the Saudi Green Initiative.

So this is our plan, ladies and gentlemen. It requires investment. A long-term view of the future. And a lot of hard work and I believe the Saudi-U.S. relationship will be central to its success.

So let me conclude by setting out what I see as the key areas of future cooperation.

First, inward investment.

Vision 2030 is a huge opportunity for U.S. firms to expand their presence in Saudi Arabia. We're targeting investments in sectors that include the green economy, digital technology, tourism and advanced materials among others. And we have a range of incentives on offer to ensure that the Kingdom can compete for your business.

On the Red Sea coast, as I've mentioned, we're building NEOM, a radically new model of urban living. In our Eastern Province we've signed our first tenants for the King Salman Energy Park - SPARK for short. SPARK will be a regional hub for the global energy services industry, a gateway to the Middle East.

Capital will flow in the other direction too. PIF's plans to transform the Saudi economy call for strategic, future-focused investment far beyond our borders in sectors spanning healthcare, transport, real estate, technology and infrastructure.

Second, I believe we can deepen our technology partnership.

There is no credible pathway to net zero that does not include carbon capture, utilization and storage. That is the most up to date assessment of both the Intergovernmental Panel on Climate Change and the International Energy Agency.

We need to make this technology affordable enough and practical enough to start to make a difference on a world scale. Longer term, the world may need solutions like direct air capture of CO2.

U.S. and Saudi innovation, combined with dedicated resources, will be vital to that endeavor. Alongside the energy transition we need a materials transition.

Nonmetallic alternatives to steel. Carbon-cured concrete that can store CO2. Single-stage crude to chemicals refining. Aramco is backing these technologies.

Together we can scale them up.

Last, we need to work together to manage a just and sustainable transition. The idea that oil and gas can be eliminated overnight from the global energy system is a fantasy. This would paralyze trade and travel, condemning billions of people to poverty and insecurity.

Our enemy is not carbon, which is one of the building blocks of life on earth. Our enemy is unchecked carbon emissions. To win this fight, we must value all efforts, all options, and all technologies that reduce the flow of greenhouse gases into our atmosphere.

So let us make and win that argument together.

Ladies and gentlemen, today we are approaching the dawn of a new era in the Saudi-U.S. relationship. We're moving from a relationship based on oil, to a partnership based on the supply of clean energy in all its forms.

A growing trade in materials. A growing exchange of ideas. A partnership based not on resource extraction, but on long-term value creation.

And although we cannot predict the future, there's one thing I know for sure, whatever happens in the years ahead, the world's most important energy partnership will be red, white, blue - and green.

Thank you.